He says municipalities can decide if they want to put the issue to a vote among residents, not the provincial government.
His comments come in the wake of a major plan by the Ontario Lottery and Gaming Corp. to expand gambling in the province.
It includes building a new casino in the Toronto area and possibly another elsewhere, such as Ottawa.
McGuinty was also confronted with his past comments as Liberal leader vowing not to expand gambling if he became premier.
He says he's changed his mind because Ontario's gaming system needs reform and it's time to "maximize" returns.